Ares Capital Corporation (NASDAQ: ARCC) is stinging existing shareholders this morning with a secondary offering. Ares Capital is a specialty finance company that provides one-stop financing solutions to U.S. middle market companies and private equity sponsors.
The company is selling 14,280,000 shares of common stock. BofA Merrill Lynch and Morgan Stanley & Co. LLC are the listed joint book-running managers for this offering and Ares granted these underwriters an overallotment option to purchase up to an additional 2,142,000 shares of common stock.
The company noted that its use of proceeds is “to repay certain outstanding indebtedness under its debt facilities and, to the extent not applied for such purposes, for general corporate purposes, which may include investing in portfolio companies in accordance with its investment objective.”
While many companies include risks and considerations in their press releases, it was a bit odd to see the BOLD typeset say Investors are advised to carefully consider the investment objective, risks, charges and expenses of Ares Capital before investing. The preliminary prospectus supplement dated January 19, 2012 and the accompanying prospectus dated October 28, 2011, which have been filed with the Securities and Exchange Commission, contain this and other information about Ares Capital and should be read carefully before investing.
Ares shares are down 3.4% at $15.54 this morning and the 52-week trading range is $12.75 to $17.97.
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